5 areas where you can cut expenses today

As the economy continues its slow recovery, Americans are looking for quick ways to cut their expenses and hold on to more cash.

Fortunately, there are plenty of ways to chop your spending without a lot of time or hassle. Some of these cuts will save you just a few dollars, while others can net even bigger savings.

Add them all up, and you could trim your annual expenses by hundreds of dollars or more.

Following are five areas where you can cut your bills fast.

5 areas to slash your bills

Energy and car gas

Food and groceries

Banking and credit

Taxes

Car insurance

1. Energy and car gas

Energy costs are boiling over.

Fortunately, some relatively cheap fixes are available, and many begin in the home.

For example, weatherstripping, or caulking doors and sealing windows, can keep out cold and heat, lowering your heating and cooling bills.

“Every little step helps, and if you can’t afford new windows or storm windows, plastic film kits aren’t a bad alternative,” says Ronnie Kweller, deputy director of communications at the Alliance to Save Energy.

Other tips for cutting home energy costs include:

Installing a programmable thermostat. These handy gadgets let you turn up the heat or air conditioning just before you get home rather than paying to keep your empty dwelling comfy all day. Lowering your thermostat by 10 to 15 degrees for eight hours during the day in winter can save 5 percent to 15 percent per year on your heating bill, according to the Department of Energy.

Switching to energy-efficient light bulbs. Yes, they do cost more than traditional bulbs, but they wind up saving money because they use two-thirds less energy and can last 10 times longer, Kweller says.

Being efficient. Clean and change furnace air filters and wrap your hot water heater. These moves help your appliances run more efficiently and cheaply. Seal ducts on air and heating systems to improve efficiency by as much as 20 percent, according to the Alliance to Save Energy.

Meanwhile, you can also trim vehicle gas costs with the following steps:

Adopt good driving habits. You’ll save a bundle if you stop speeding. If you typically race around at 70 mph instead of 55 mph, you’re lowering your vehicle’s fuel efficiency by as much as 17 percent, according to the American Council for an Energy-Efficient Economy, or ACEEE.

Pump up your tires. Tires lose about a pound of pressure a month, and if you drive with tires that are 3 pounds underinflated, your vehicle’s fuel economy drops by 1 percent, according to the ACEEE.

Clean your car. If your car resembles a junk yard on wheels, clean it out. If you’re hauling around 100 extra pounds, for example, you’re lowering fuel efficiency by up to 2 percent, according to the ACEEE.

2. Food and groceries

Americans spent an average of $6,602 a year on food in 2013, according to the U.S. Department of Labor’s Consumer Expenditure Survey. With prices going nowhere but up, food is taking an increasingly bigger bite out of our budgets.

How can you save on something so fundamental? It’s actually not difficult. A family of four can slash $240 from its monthly food budget by switching from pricey meals to lower-cost options, according to the U.S. Department of Agriculture.

The key is to embrace culinary change rather than fearing it.

“We can’t be doing the same thing the same old way,” says Sheryl Garrett, author of the “Personal Finance Workbook for Dummies.”

Store shelves are crammed with relatively expensive prepackaged convenience foods designed to save time, Garrett says.

“But what we need to do is try to remember two simple words: whole foods,” she says. “Instead of buying prepared, frozen, twice-baked potatoes, buy a real live whole potato. It costs a fraction of the price, pennies per pound. And it probably even tastes better.”

Here are some ideas for saving at the supermarket:

Buy food less frequently. If you’re running to the market before dinner each night, it’s time to quit. Instead, think about what you want to eat for the next few days, and buy groceries at once. You’ll save money, time and gas.

Use a shopping list. A full two-thirds of purchases at grocery stores are impulse buys, according to Paco Underhill, CEO and founder of Envirosell, a market research and consulting company. To reduce that temptation, make a shopping list and stick to it.

Pay with cash. You’ll be more likely to stick to your shopping list.

Stick to the perimeters of the supermarket. That’s where you’ll find all the unprocessed basics you need — dairy products, meats, bread — while avoiding inner aisles brimming with tempting, processed foods that drain budgets.

Buy in season. Craving strawberries in January? You’ll pay top dollar. With that in mind, make it a habit to eat seasonable, locally grown produce. Guard against cravings by canning or freezing fresh items so you can enjoy those berries any time of year.

Cook cheaper meals. Instead of serving huge portions of meat, use it to supplement larger portions of rice or pasta in affordable casseroles. For other low-cost ideas, check out the U.S. Department of Agriculture’s “Recipes and Tips for Healthy, Thrifty Meals.”

3. Banking and credit

The most recent Bankrate survey of the 10 largest banks and thrifts in 25 of the largest markets found that banking fees — from ATM surcharges, overdraft fees and account charges — are all increasing.

Don’t just take these fees and rate hikes lying down. For example, if your lender hikes your credit card rate, call to have it lowered. You’ve got a 50-50 chance of getting resolution, according to a consumer study by U.S. Public Interest Research Groups, or U.S. PIRG.

“Credit card companies will routinely raise your rates to see if they can get away with it, so you have to be vigilant,” says Ed Mierzwinski, consumer program director at U.S. PIRG.

When it comes to some fees, you may be your own worst enemy. For example, spend more than your credit limit these days and you’ll be allowed to shop if you authorize the credit card company to allow it. The catch: You’ll owe an over-limit fee.

Read the fine print. Pay attention to requirements that could wind up costing a bundle. A free checking account may sound appealing, but is there a minimum balance requirement? If you can’t meet it, you may wind up paying fees that make that free deal pricier than you thought.

Watch out for ATMs. Whenever possible, pull cash out of your ATM in larger amounts to reduce repeat visits to the machine. According to Bankrate’s 2014 survey of ATM fees, the average ATM fee for nonaccount holders was $2.77. However, some banks charge more. Tack on the foreign-use penalty your own bank levies when you use a competitor’s ATM and you could well be spending nearly $5, or 25 percent of that $20 you grabbed on the go.

Chuck the debit card. Putting away the debit card lowers the odds of triggering courtesy overdraft protection fees. They kick in when you use a debit card and make purchases that exceed your account balance. Overdraft fees now average $32.74 per transaction, according to the latest Bankrate checking study.

Pay on time; beware of default rates. Miss a payment deadline and chances are you’ll wind up paying hefty fines. In fact, if you’re late on one bill with any creditor, your other creditors can legally use that tardy track record to jack up the interest rate they charge you. When you get bills, mark their due date on a calendar or set up automatic payments so you don’t miss deadlines.

Scrutinize statements. More than two-thirds of lenders, 77 percent, say they can change rates “at any time for any reason,” according to Consumer Action. So even if you pay on time each month and think you’re an ideal customer, study your statement and look at the fees, your interest and other unexpected changes that can cost a bundle.

4. Taxes

If you’re like most people, you probably don’t pay much attention to taxes until April 15 rolls around. But taxes affect us daily, whether we’re working, shopping or saving for important milestones like retirement.

Here are a couple of ways to reduce taxes:

As it turns out, fall is the perfect time to trim taxes. This year, 16 states sponsored reprieves from sales taxes as part of back-to-school shopping. The dates typically are scheduled anytime from the last week in July to mid-August.

Grab breaks for low-income earners. One out of 4 eligible taxpayers fails to claim the earned income tax credit, or EITC, worth as much as $6,143 a year depending on someone’s earnings, marriage status and whether they have children or other dependents. If you qualified for but didn’t claim the EITC, file an amended tax return.

5. Car insurance

Americans typically spent $1,020 to insure one medium-size sedan in 2013, but in many parts of the country, premiums can be much higher, depending on the type of car you insure and your driving record. Yet, there’s still much you can do to lower rates.

Boost your deductible. That’s the amount you pay out of pocket before insurance kicks in. Raise yours from $250 to $500, and you’ll shave money off your insurance premium because you’re essentially agreeing to take on more financial burden in the event of a mishap.

Trim insurance for that old clunker. If your wheels are worth little, consider getting rid of collision coverage, which pays for repairs.

Snag low-mileage discounts. Have you cut back on your driving to save gas? Let your insurer know. If you don’t drive much, usually no more than 7,500 miles a year, you can get rates lowered.

Bundle your policies. Buy more than one policy from the same insurer and you may well get a break of 5 percent to 15 percent, according to the Insurance Information Institute. So try keeping your auto, homeowners and other insurance policies with one company.

Make age-appropriate auto decisions. A driver’s age may impact insurance rates. So, restrict your teen to driving the family’s oldest car. Then, let the insurance company know your son or daughter has no access to more valuable cars you own. Older drivers may also pay higher rates. Seniors ages 55 to 70 may qualify for price breaks if they take a safe-driving course, such as the 55Alive program that’s run by the AAA and the National Institute of Highway Safety.

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